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For Organizations and Social Entrepreneurs

Activities of a PPESCO

PPESCOs’ primary activity covers four essential services: (1) technical assistance to the building owner; (2) installation of building energy improvements; (3) financing—whether linking owners to sources of capital or providing direct PPESCO capital; and (4) energy performance contracting, to guarantee energy savings that supports the estimated rate of return for investors and to protect building owner’s investment in the improvements.

Generally speaking, good candidates for PPESCO projects are buildings with annual energy and water costs of $50,000 or more. The best candidate buildings are those that have not yet had significant energy work.

The PPESCO needs to be prepared to undertake all of the following activities:

  • Sourcing capital: Soliciting possible investors and other capital sources, to acquire capital for start-up, building projects capital investment, and credit enhancements
  • Sourcing projects: Owners and operators of buildings that might be good candidates are identified through professional networks. Direct and indirect marketing and sales might need to be used
  • Selecting possible projects: Screening for fit (sector, region, and mission) and that are optimized for available capital and resources
  • Connecting with the building owner: Engaging building owners with a compelling value proposition related to energy savings and partnership
  • Researching the project: Potential projects undergo an energy audit; design-engineering analysis; and an economic analysis of savings, costs, and capital
  • Negotiating with the building owner: Projected savings, and through the energy performance contract, PPESCO and the building owner / manager agree on project scope, define roles and responsibilities of each party, clarify expectations, and determine the legal and financial terms of engagement
  • Carrying out the project: PPESCOs undertake and complete the project work according to the contracted agreement:
    • Pre-construction: preliminary audit for project qualification; financing and subcontracting
    • During construction: project scheduling and management, installation
  • Engaging with owners, managers, and occupants: After a project is complete, ongoing measurement and verification (M&V) will be needed. PPESCOs seek to create a long-term relationship with building owners, managers, and occupants. This activity will involve training for optimal energy use behaviors, energy performance reporting, and identifying further energy projects